Why the Death of the PC Isn't Holding Back the Dow

New record highs for the stock market have turned into a regular occurrence, so today's advance into uncharted territory isn't drawing nearly as much attention from investors as this year's first round of all-time highs did. Fairly benign data on jobless claims and a lack of troubling news from around the world generally left the stock market in bull mode, and by 10:55 a.m. EDT the Dow Jones Industrials climbed 59 points, or 0.4%, while the S&P 500 advanced by a similar percentage.

But beneath the Dow's calm advance, there's a battle going on. Yesterday the Dow's tech stocks advanced sharply, with investors questioning whether their beaten-down valuations had too harshly penalized big technology companies for their growth challenges. Yet this morning IDC reported that PC shipments fell by 14% -- the worst quarter ever in the nearly 20 years that IDC has given data for the industry. That sent Hewlett-Packard down more than 6% and Intel falling 2.5%, as both companies continue to rely on PCs for a big portion of their business despite their attempts to diversify their exposure into more promising areas.

Moreover, big guns on Wall Street remain unconvinced that big tech is a big value. Microsoft has fallen nearly 5% after Goldman Sachs downgraded the stock, giving it a rare sell rating. The analyst's report offered a familiar warning: Microsoft needs to move past its PC-based software and find new avenues for growth. Yet as the company has missed analyst projections of sales for its Surface tablet, its highest-profile attempt to get into the mobile market may not be enough to pull the stock up.

But tech is having no effect on the rest of the market, as earnings season continues to produce some strong results. Drugstore chain Rite Aid has soared nearly 20% on news that the company posted an annual profit last year -- its first gain after four consecutive years of losses. With earnings projections of $0.04 to $0.20 per share for the coming fiscal year, the company is optimistic about its chances to continue rebounding even as competing drugstore chains have seen better growth prospects and have far less debt to worry about. Still, if Rite Aid can keep improving, its beaten-down shares have plenty of room to run higher even after today's jump.

Today's reversal for Microsoft is just the latest disappointment that investors have had to deal with. To find out whether Microsoft is doomed to share the same fate as the PC, turn to the Fool's premium research report on the tech giant. Inside, you'll get the latest on the Surface tablet, the Windows 8 operating system, and other ideas the company has to escape the PC's downward spiral. You'll also get regular updates as key events occur, so be sure to claim a copy of this report now by clicking here.